NEWSLETTER # 33 SPRING 2004
Topics:
IT’S YOUR CALL
We’re the good guys, doing what we can to help protect the future of the next generations. Our effectiveness will increase as we increase our membership and our activity in promoting our ideas.
On membership, how about suggesting to an acquaintance that they join us. Or, at least give this newsletter or the last page to someone. Then, if they express interest, make it easy for them to join.
On activity, you could contact your member of Congress (or someone on their staff). Or submit a letter to the editor. See "WE WELCOME YOUR INPUT" below.
It’s your call.
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SAFE Founder, Bill Morris
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SAFE Founder, Bill Morris and some buddies started discussing AARP’s big government bias in 1995. After some preliminary activity, SAFE was incorporated in 1997.
Bill, from Missouri, is retired from the DuPont Company where he was an expert in gasoline manufacture. At 83 years old, he plays tennis three times a week, and helps Spanish speakers improve their English. We expect him to remain active in SAFE for several more years.
SAFE SUPPORTS ARP
Whoa! We don’t’ mean AARP! We mean Alliance for Retirement Prosperity. ARP is promoting a specific proposal for Personal Retirement Accounts (PRA’s) that should solve the Social Security problem. The proposal is outlined in a report “A Progressive Proposal For Social Security Retirement Accounts” 6/13/03 by Peter Ferrara. It is Institute for Policy Innovation Policy Report No. 176 (See ipi.org). ARP has embraced the report and is vigorously promoting its adoption (See arpnow.org).
Ferrara proposes use of 5% of payroll taxes for PRA’s, plus an additional 5% (10%) for the first $10,000 income. This is meant to give low wage earners additional help in accumulating retirement funds. ARP has obtained valuable support from the Chief Actuary of the Social Security System. He is quoted on their website as saying that if implemented, “The Social Security Program would be expected to be solvent and to meet its benefit obligations throughout the long range period 2003 through 2077 and beyond.”
ARP lists 17 organizations backing the proposed, including Citizen Against Government Waste, Citizens for a Sound Economy and Small Business Survival Committee. We expect SAFE to be added soon.
We understand that AARP has asked ARP to change their name, but ARP refused. Each agree that they don’t agree with the other. The April 2004 AARP Bulletin includes a brief comment “Founders of the new Alliance for Retirement Prosperity, or ARP, swear they had no idea their ARP might be confused with AARP – even though the two names bear an uncanny resemblance.
ARP was formed by three Republicans – Dick Armey, Dorcas Hardy and Jack Kemp – to lobby for personal accounts within Social Security, a policy AARP strongly opposes.
ARP emphasizes opposition to “—most of what AARP espouses, especially the reactionary opposition to personal retirement accounts and retirement prosperity.” In addition they have challenged AARP to debate the subject but AARP hasn’t responded for over a month.
WE ENDORSE THE 6.2% SOLUTION
Peter Ferrara, Michael Tanner and many others have worked on the Personal Retirement Account solution to the Social Security problem for many years. Ferrara’s “Progressive Proposal”, published last year, is discussed in the preceding section. Tanner’s plan, “The 6.2% solution” was published February 17, 2004. SAFE Directors decided to endorse the 6.2% solution, and a news release was issued to that effect. A copy of the news release is below.
Subsequently, SAFE Directors decided also to support the “Progressive Proposal”. More about the two plans in this next section.
LETTER FROM DIRECTORS
WE LIKE BOTH
We believe either proposal for instituting Personal Retirement Accounts would solve the Social Security insolvency problem. As young workers choose that option, their need for and claim for future benefits would be reduced.
The AARP opposes this “carve out” approach and suggests increasing the payroll tax to add Personal Retirement Accounts on top of Social Security. However, this would add taxes without solving the problem of only two workers per retiree in the future.
There will be a transition cost as payments to Personal Retirement Accounts decrease the amount of payroll tax available for payments to current retirees. The transition cost avoids leaving the debt to be paid by our children and grandchildren. The two proposals include different suggestions for paying the transition cost.
Both proposals apply to workers younger than 55, allowing them to select Personal Retirement Accounts and receive reduced standard Social Security benefits. Both provide backup benefits in case investments don’t work out (highly unlikely).
The main difference is that the “progressive proposal” uses 10% of the first $10,000 income and 5% thereafter. This can add complexity when a worker has more than one job. The percentage used for PRA’s is not much different for the two proposals, and matches at $41,667 income. The bottom line is that the proposal more likely to be accepted is the better one. We just hope one is accepted as soon as possible, with as little added complexity as possible.
WE TOLD YOU SO
In the “we told you so” department, here are updates about Medicare that were recently posted on the SAFE Website (see comments on the news).
PRESCRIPTION DRUG LETTER
Here is a letter published by The Wilmington, DE “News Journal” (Bill Morris) and submitted to the Tucson, AZ “Tucson Citizen” (Ed Kahn). Bill and Ed both hope members in other states will submit it “as is” or as the basis for another version. Please do it, and send us a clipping (or copy) if published. Thanks. Here it is:
The New Medicare bill including prescription drugs is another load on the backs of the next generations. It is unfair to our children and grandchildren, and is a classical case of overkill. The bill includes millionaires and middle class retirees who can easily pay for any drugs they want.
AARP has been promoting a prescription drug benefit for years. Typically, the Washington, D.C. office of AARP pushed for inclusion of everybody in this welfare bill. When everybody is included, they pay the government, then the government pays them. I have a name for this - Socialism.
Let’s remember the federal government is broke. If voters are dead set on providing prescription drug welfare, then leave it to the individual states. Those interested in the future welfare of their children and grandchildren should demand repeal of this unfair bill.
WE WELCOME YOUR INPUT
Until now, SAFE newsletters have included articles by members of the SAFE Board of Directors, a group that represents a small percentage of the total membership of our organization.
Hopefully, we’ve reflected your viewpoints pretty well and provided some useful food for thought, but it would be good to have some positive confirmation. Even Rush Limbaugh has “open line Friday.”
So please, if you would like to see your ideas in print, send us a proposed story (ideally less than 500 words in length) that relates to the SAFE interest in not running up a big bill for Government benefits today and leaving the bill for our children and grandchildren.
The deadline for the Summer Newsletter is June 30th. Please send your submissions to Bill Morris, 2124 Brandywood Drive, Wilmington, DE 19810.
NO SOCIAL SECURITY GUARANTEE
In 2002 we sent a letter to the State Directors of the staffs of U.S. Senators and Representatives on Social Security Committees, opposing a bill to guarantee Social Security benefits for all future retirees. The reason was that if Social Security is not reformed, maintenance of the current level of benefits will result in a crushing level of taxes in the future for younger taxpayers.
We believe prospects for reform are good, but we continue to oppose a guarantee just in case.
In 2002, the United Seniors Association was supporting a guarantee under HR3135 and S1553. Mailings received this month (April 2004) show the Seniors Coalition supporting a guarantee (HR812) and the Council for Government Reform supporting a guarantee under a Constitutional Amendment (HJR 88).
SAFE OFFICERS
President
Barry Dorsch, Wilmington, DE
(302) 478-0676
President-Elect
Bill Whipple, Middletown, DE
(302) 376-7036
Treasurer
Ed Fasig, Wilmington, DE
(302) 999-0611
Director 2004-2006
Dick Reese
Wilmington, DE
(302) 478-4970
Director 2004-2005
Jerry Martin, Wilmington, DE
(302) 478-5064
Director, 2004
John Boughton, Wilmington, DE
(302) 475-6718
Ed Fasig, Wilmington, DE
(302) 999-0611
